Mongolia Keen on IPOs for Mineral Assets

15 December 2009 (Last Updated December 15th, 2009 18:30)

Mongolia is seeking IPOs for its state-owned mineral assets in New York, London, Hong Kong and other international stock exchanges so it can boost its revenue from natural resources. Mongolian Prime Minister Batbold Sukhbaatar said the government is considering the establishment of one

Mongolia is seeking IPOs for its state-owned mineral assets in New York, London, Hong Kong and other international stock exchanges so it can boost its revenue from natural resources.

Mongolian Prime Minister Batbold Sukhbaatar said the government is considering the establishment of one company for holding the mining assets and one each for energy and infrastructure holdings.

Sukhbaatar said once the assets are listed on major international stock exchanges they will then seek to list them on the domestic exchange, according to the Wall Street Journal.

Investors have shown keen interest in Mongolia which contains vast unexploited mineral reserves and is located close to China, which has a huge demand for commodities such as copper, iron ore and coal.

Following appointment as Prime Minister in October, Sukhbaatar presided over the signing of a $4bn mining agreement with Rio Tinto and Ivanhoe Mines for the development of a gold and copper deposit in the Gobi Desert.

The agreement has spurred several other resource projects that are waiting for government approval and could help boost Mongolia's economy.

The Mongolian Government plans to divest a 49% stake in the Tavan Tolgoi coking-coal mine, which will raise billions of dollars.

A proposal for development of the mine is likely to be submitted to the parliament in the first half of next year, which will then trigger talks with potential investors.